University of North Florida
Board of Trustees
Finance and Audit Committee

Meeting

March 17, 2005
University Center at 9:00 a.m.

Minutes

Committee members present

O’Neal Douglas, Steve Halverson, Wanyonyi Kendrick, Jerry Watterson

Committee members absent

Edythe Abdullah, Kevin Twomey

Other trustees present

Judith Solano

Vice Chair Kendrick called the meeting to order and asked for a motion to approve the minutes. The motion was offered by Trustee Douglas, seconded by Trustee Halverson, and approved unanimously.

Financial Statement Audit Report

Vice President Shuman said that most of the information in the statements had been provided to the committee in quarterly reports. The statements were included with the State of Florida financial statements. She said the report was for the trustees’ information only, no action was required. There were no questions or comments.

Federal Awards Audit

Vice President Shuman said the state did an audit of all federal grants received including financial aid awards. UNF was only a small portion of that report. The state’s full report would be released in March or April and would include all universities and state agencies. Three comments had come out of the UNF audit. The first comment had to do with a small dollar amount of $3000; when students withdrew from classes, depending on how late in the term they withdrew, monies had to be repaid. There was a university instrument for faculty to input when students withdrew but faculty needed to be encouraged to document the information. Regarding the second comment, Ms. Shuman said all monies, about $200,000, had been recorded, just not in the appropriate places. The errors were due to a changeover in staff in the Controller’s Office and were being corrected. The third comment was about a match from Sponsored Research; the University determined that the match was not required, therefore Sponsored Research had acted appropriately.

Vice Chair Kendrick said it seemed the University had immaterial comments this year. She asked how the comments compared to the previous year. Ms. Shuman said the comments were typical of what the University usually received. Dr. Serwatka noted that all universities received comments regarding notification of student withdrawal from classes. Trustee Solano asked what would happen to the input system once the University switched to the Banner system. Vice President Shuman assured her that the same system or a similar one would be put in place. Ms. Kendrick verified that Dr. Khan had reviewed the comments.

Charter and Responsibilities for the Office of Internal Auditing

Dr. Khan acknowledged Vice President Kendrick, thanking her for providing the charter for her organization. He also thanked Vice President Shuman, Karen Stone, Linda Anderson, and Richard Crosby for their input on the draft. He noted that several universities had changed the name of the Auditor General’s office and position to be more customer friendly. Ms. Stone pointed out that the previous titles were statutorily required but that had changed under devolution. Trustee Douglas said the change was consistent with current business practices. Dr. Khan said the charter established the independence of the Office of Internal Auditing while the second document delineated the FAC’s responsibilities in regard to that office.

Trustee Douglas asked about the new charter and responsibilities in relation to the Sarbanes-Oxley act. Dr. Khan said that though the University was not required to do so by law, it had the obligation and responsibility to institute those parts of the act that could strengthen control and oversight and had done so. Trustee Douglas observed that the chair of the FAC should have a financial background, as indeed, should most if not all of the committee members. He said it was important to be consistent with the overall regulatory atmosphere as it related to the FAC. President Delaney said he had read a great paper on Sarbanes-Oxley and joked that it should be renamed the accountant’s relief act. He noted that one of the actions suggested by the act was to separate the audit committee from the finance committee. He said that such an action did not seem to make sense for the University as the board was so small that the same group of people would then just have to serve on both committees. Also, the University’s documents were public record thus financial reporting was not an issue. Trustee Douglas said he would encourage the committee and University administration to consider whether committee members and/or the committee chair should be required to have a financial background to serve on the committee. Trustee Halverson agreed, particularly regarding the needed qualifications for the committee chair. President Delaney suggested that he and Vice President Shuman go through the outline and come back with suggestions.

Vice Chair Kendrick said she had thought trustees had planned to go over the Sarbanes-Oxley Act in a workshop. Trustee Halverson said he would like to recognize the good work done over the last year to improve internal controls. He said the University and the Board were much better off than they had been in the previous year and he credited Vice President Shuman substantially for the improvement. He offered two suggestions. Stating that he believed the Sarbanes-Oxley Act contained more good than bad, with the only problems being a tendency to over report and over-administrate, he encouraged the University to model after the act, using any controls that would fit a public university within the statutory requirements already in existence. Secondly, he felt there should be more discussion regarding the committee’s responsibilities as outlined by the Office of Internal Auditing; he did not believe the document quite captured what the committee’s responsibilities ought to be. Dr. Khan said he appreciated any comments trustees would like to suggest as he thought it would make for a stronger document. Vice Chair Kendrick said she would recommend including an internal risk assessment. She said it was not clear to her what oversight the office was under and asked if it used OSO. When Dr. Khan replied in the affirmative, she said the foundation the charter was based on should be made clear. President Delaney asked if trustees would send any other comments to him, Vice President Shuman or Dr. Serwatka.

Vice Chair Kendrick thanked everyone for the great discussion and asked Vice President Gonzalez to discuss the item on child care fees.

Child Development Research Center (CDRC) Fees for 2005-2006

Dr. Gonzalez stated that each year, after analyzing the CDRC’s fees, recommended changes were brought before the Auxiliary Oversight Committee and submitted for student review as well. Six adjustments were recommended in an effort to balance the budget for the following year. He noted a proposed increase of $15/day and $7/half-day for students, remarking that the students appeared to be okay with the increase. The classifications for UNF faculty and staff were combined with the general public for one shared fee structure, resulting in either no change or a decrease from previous fees for faculty and staff, with the exception of a $10 increase to the registration fee, and a decrease to most of the fees for the general public. The reason for the reductions for the general public was to bring the fees for the center more in line with comparable facilities in the area. Dr. Gonzalez said the center had priced itself somewhat out of the market and had lost customers as a result.

Vice Chair Kendrick asked for questions or comments. She added that her daughter had attended the center and that it was state-of-the-art. Trustee Halverson moved in favor of the changes. The motion was seconded by Trustee Douglas and passed unanimously.

Signature Authority

Stating that the item was returning to the committee after a request for further clarification from the board, Ms. Shuman said that the responsibilities and limits for each position had been more clearly outlined.

She said that Dr. Khan had reviewed the check writing system and found no problems. Additionally, one employee, Margie Warden, was transferring to another department and her name was being removed from signature authority. Trustees had no comments or questions on the item.

Quarterly Budget Report

Vice President Shuman said the quarterly report was the first one completed with the new Banner system. As of February 28, the different budgetary units of the University should have spent 66 percent of their budgets. All of them, with the exception of Academic Affairs, had spent below that percentage. As Academic Affairs would be in full force through April then slow down for summer, which was much less expensive, this was to be expected. Ms. Shuman said she was still working on projections; the current report only showed where the University was now. Trustee Halverson verified that footnotes would be provided to explain variances in future reports. Ms. Shuman said they would. Ms. Kendrick observed that the ability to produce a financial report so soon after deploying the new system boded well.

Treasurer’s Report

As of January 31, the report showed the cash flow summary for the University, including major auxiliary units. She asked the trustees to let her know if they would like to see more detail on the funds. Trustee Halverson asked if the cash balance was usually in the $80 million range and Mr. Neglia replied that it was. Vice Chair Kendrick asked if there were questions or comments. Trustee Watterson said the $400,000 amount for Student Government looked low to him and asked if he could talk with someone about it after the meeting. Ms. Shuman told him to come by her office.

Master Plan Update

Beginning in April with a presentation to the board by R S & H, the current draft of the revised master plan had been discussed in eight focus groups, several planning charettes, and been presented to city planning, Mr. Crosby said. Overall, there had been positive response to the plan.

In discussing the plan, Mr. Crosby began at the campus core. He indicated the proposed new Housing office and facilities for student medical services in Osprey Hall and Osprey Landing, stating that Housing was currently located in a portable and Student Health was in building 14. He said expansion was planned for two buildings: building 6 and the Matthews Computer Science Building. Construction on the first wing of the new L-shaped Social Science Building (to complement the Science and Engineering Building across from it) is to begin this summer.

Mr. Crosby talked about parking on campus, stating that some parking had already been lost and more parking disruptions were inevitable due to upcoming construction on the new Student Union and the new College of Education Building. He said the University was looking at parking on the perimeter of campus to replace the parking lost at the campus core. He said construction on another garage was planned to begin in 2007, though the location was still being discussed. In response to a question from Trustee Halverson about available parking spaces during campus construction, Vice President Shuman said a flat lot of 800 spaces might be used during the interim. President Delaney noted that the parking issue might accelerate the need for a shuttle. Mr. Crosby added that mechanisms that might support a shuttle were already underway, including expanded service from JTA between the University, the new Town Center Mall, and the rest of the area, as well as discussions with the mall itself. He also said it was possible to assess a transportation fee if needed.

Regarding the Student Union, Mr. Crosby said the University was in the process of finalizing selection of a firm to design the complex, expected to cost between $30 and $40 million. The new building would be located nearer the Athletics complex. The old Student Union would be used for academic purposes. An alumni house was planned for adjacent to the Student Union, along with a green for events.

Indicating the map, Mr. Crosby said building 11 would be demolished with the completion of the first wing of the Social Science building. He said attractive signage would be placed at all entrances. Along parking lot 100 near the police department, locations for a pavilion, welcome center, sanctuary, and parking operations office were being considered in conjunction with the existing nationally recognized nature trails.

Mr. Crosby said the University intended to concentrate utilities, storage, etc. on the western ridge of the campus by Central Parkway where they would not be as visible or unsightly. On the north end of campus, the University was involved with heavy discussion with various environmental groups regarding a proposed road. President Delaney said the road was the only potentially controversial component of the plan.

Even so, he said he believed the bulk of the environmental community had signed on to the idea and he thought the road would be designed to be as environmentally friendly as possible. Mr. Crosby confirmed that the road would be earth friendly in an attempt to protect the plant life and hydrology of the area and said that the University was talking about designating the northwest quadrant and the wetlands to the south as living learning laboratories.

Expansions to the Arena and the fitness center had been proposed. Planners had also suggested relocating the tennis complex to the northern property, freeing up the space for other types of athletic recreation facilities or other expansion.

Returning to the western ridge of the campus, Mr. Crosby said significant development was planned for the site over the next five to ten years including Greek housing, completion of the road coming out to Central Parkway, future recreational expansion for Athletics, relocation of physical plant facilities, campus storage, and high bay facilities near the Central Parkway industrial park, the possible addition of another 800 parking spaces, a skate park paid for by Student Government, and possibly the next and/or subsequent parking garages. There were a few areas designated for undefined future development. The University was also considering expanding the bike path system and constructing roundabouts to facilitate the smooth flow of traffic.

Mr. Crosby talked about future housing on the eastern ridge of campus, stating that all of the buildings were going higher to maximize the limited space on campus. The next housing facilities were planned as six-story buildings with suite style rooms. He said the University had selected an architectural firm to develop the criteria for a design-build RFP for the building. Twenty foot wide, environmentally friendly boardwalks would connect the housing to the campus core. President Delaney said the goal was to have about 19 percent of UNF’s students living on campus in order to be consistent with the national average. Currently, about 16 percent of the student population resides on campus.

Mr. Crosby said purchase of lands in the First Coast Technology Park was the second item on the PECO request. Indicating the map, he said it was clear how dense the campus was going to become in the not-too-distant future, thus the University would need more land for future expansion. In the interim, the land could easily be used for short-term parking. Another issue being discussed was six-laning Kernan Blvd. with overpasss at Beach and Atlantic. Members of university administration were meeting with city officials in an attempt to have Kernan rerouted around the technology park, leaving the original Kernan as a campus access road. President Delaney said the city seemed amenable to the idea so far. He added that the University was in litigation in an attempt to stop the sale of one piece of the technology park, which could cost a bit in order to resolve the issue in UNF’s favor. The dispute had to do with the amount of property the University intended to sell; the amount was off by 50 percent. Mr. Crosby said that Councilman Art Graham was pushing hard to have a bike path tied with the proposed changes to Kernan, which, he said, would tie nicely with the University’s plans for the campus.

Mr. Crosby said today’s presentation was the first informal presentation and would be followed by a presentation to the BOT in June with the University seeking full board approval. He said the plan would go to agency review in April and that UNF hoped to be first in submitting a plan to Tallahassee this year in the hopes of garnering more funds. Vice Chair Kendrick thanked him for his presentation.

Trustee Halverson asked for a listing of the next major projects already funded for the coming five years. President Delaney replied that they were the Student Union, the Social Science building, the wing for the College of Health, and possibly the money for building the coaches’ offices under the stadium.

A discussion regarding campus housing ensued. President Delaney said the University could virtually mandate freshmen to live on campus. Trustee Watterson said many people would prefer to live on campus but because of the limited housing available, many upper classmen could not. Vice President Gonzalez added that there was a list of upper classmen who wanted to move on campus. Vice President Shuman said the University was trying to determine the type of housing that would be best. She said her office was looking at the pro forma and thought one had been found that would work. She noted that the suite layout was expensive as was the infrastructure, which would have to be included in the first phase of the housing construction. Her office was trying to make sure the new housing facilities would stand on their own, at least after the first couple of years. The idea of having the upper classmen live in the new facilities and the freshmen living in the campus core had also been discussed. Trustee Halverson said he applauded the University’s goal to increase the percentage of students living on campus, stating that UNF would be a better university faster because of it.

Mr. Crosby introduced Mr. Zak Ovadia, who came to Facilities Planning from Dartmouth, the University of Washington, and the Washington State Governor’s Office.

With a return to the discussion on university signage, President Delaney said Ms. Shuman’s office was looking for something thematically. Vice President Shuman said they were considering a street competition for faculty members and artists in the community to see what they got back.

Vice Chair Kendrick thanked President Delaney and his staff. She said she attended the students’ awards function and had been very impressed with their scholarship.